A survey by CGS-CIMB Research showed that Malaysians either delayed or cancelled plans to acquire property due to the COVID-19 outbreak.
This comes as respondents did not believe that it is a good time to buy a home now and consider current property prices as unaffordable.
“They preferred equity market as an investment option, signalling wealth spillover effect from retail market rally to property could be limited,” said CGS-CIMB Analyst Ngo Siew Teng as quoted by The Edge.
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The survey revealed that 44% of respondents had plans to acquire a property this year before the COVID-19 outbreak.
Of these, only 35.5% intend to push through with their property acquisition this year, while 32.7% are postponing their property acquisition plans to 2021. The remaining 31.8% changed their mind about purchasing a house.
“Overall, 41% have unchanged interest in property investments, 39% have decreased interest, while 20% have increased interest following the COVID-19 outbreak,” said CSG-CIMB.
With purchasing budget of between RM250,000 and RM499,999, respondents prefer newly-launched properties as well as landed homes in Selangor and Kuala Lumpur.
It also showed that majority of first-time buyers and property upgraders favour landed residential properties.
“We also observed that property investors have a higher interest in commercial retail space or shops as well as vacant land, while the other groups are more receptive to acquiring property through auctions,” added CGS-CIMB.
With this, the research house said developers should adjust to buyer preferences.
“We expect developers to be well-positioned to capture the potential home buyers’ interest with properties priced at an affordable range around RM500,000, even if property buying sentiment remains muted,” said CGS-CIMB.
It prefers Sime Darby Property Bhd since the company is well-positioned to tap into existing market trend, given that majority of its new launches are landed homes while the bulk of its land banks are within the Klang Valley.
“We reiterate sector Neutral given the weak macro outlook, affordability issues and likely lower property sales, which is balanced by KL Property Index’s undemanding valuation,” it said.